Tunisia’s Experience with Real Exchange Rate Targeting and the Transition to a Flexible Exchange Rate Regime
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
Over the past decade or so, Tunisia has experienced a strong economic performance while pursuing a constant real exchange rate rule (CRERR). The limitations of this rule are now beginning to emerge in the context of a more open economy, regional integration, a more market-based monetary policy, and the desire to relax capital controls. This paper explores how Tunisia avoided the pitfalls of real exchange rate targeting as predicted by the theoretical models. By estimating the equilibrium real exchange rate based on fundamental variables and assessing different measures of competitiveness, the paper finds no evidence of a misalignment in the current level of the exchange rate.
Series:
Working Paper No. 2002/190
Subject:
Exchange rate arrangements Exchange rates Foreign exchange Inflation Prices Real effective exchange rates Real exchange rates
English
Publication Date:
November 1, 2002
ISBN/ISSN:
9781451859676/1018-5941
Stock No:
WPIEA1902002
Pages:
27
Please address any questions about this title to publications@imf.org